once they sell the equipment, they're selli ing forever. >> as far as my final trade, general motors somebody just came in with a lot of calls to buy in general motors bought them. >> all right, guys thank. that does it for "halftime." "the exchange" with kelly evans begins now >> thanks, brian hi, everybody. here's what's ahead this hour. a baby bear market and a thin on hold could be one of the best things to happen to stocks if a long time. we'll tellyou if there's still time to buy. washington versus wall street. chuck schumer and bernie sanders thinks we need to cap corporate buybacks, saying it's an enormous problem for workers we'll discuss that in rapid fire and trolling the tv networks why we think jeff bezos' prime-time appearance with the nfl kmicommissioner at the supe bowl could spook tv execs. >> we started the day off in the red, but we are firmly -- maybe

not firmly, but in the green the dow industrials up the s&p 500 up by eight points and the nasdaq, really the outperformer up by almost a percent a lot of the names you know are powering those particular moves. check out what's happening with the f.a.n.g. stocks. overall, facebook, amazon, netflix, alphabet, all to the upside netflix, up by almost 3% at this stage. and remember, alphabet puts its earnings up after the bell today. and speaking of alphabet shares, they are going to be a huge focus, a lot of index funds tied to this particular stock and remember, for this particular move, up already a percent. the options market is pricing in right now a plus or minus 4% move for those alphabet shares on the heels of earnings so certainly, kelly, a big stock to watch today back over to you >> welcome to "the exchange," i'm kelly evans. the dow and s&p aren't nearly as strong as the nasdaq this after the delayed november factories order report pointed to a much weaker quarter for gdp than

previously thought but neel kashkari is saying that the fed's pause is helping to keep growth on track and slack may be the tip of the iceberg for ipos this year, bob, is that correct? >> there's an outside chance that 2019 could be an all-time record for ipos, passing even the legendary '99 and 2000 years. renaissance capital estimates there are at least 226 private companies looking to go public in 2019, with a market value of $697 billion that could raise north of $100 billion for the full year. $100 billion raised for ipos in a single year? never been realized before closest we came, those '99 and 2000 years that represented the height of the ipo/dotcom boom when just shy of $100,000 was raised in both of those years. this year, 119 companies could be classified as unicorns. they're the bulk of the evaluations, they include big, well-known names, your ubers, your wework, even ge health care

could be on there. that's the good news but it's not clear who's going to buy all of this stuff the constituency for ipos looks smaller than 2019. and lots of ipos, lots of choices. pressure on prices >> so when you say the people who might buy these ipos is smaller than it was 20 years ago, is that because there's less participation from the general public or why is that? >> there's less demand for ipos. some people would point out there has been regulatory problems, some people, pricing problems overall i hope that will change when we get some real big ones this year like uber and lyft >> bob, you use slack? i know we have it here at cnbc >> i love it it makes it very easy to communicate with cnbc.com. i write articles for them and that's how i communicate with the people who are publishing my stuff. >> all right well, you've got an inside, i guess, scoop on its viability. bob, thank you so much bob pisani down at the new york stock exchange let's talk more about this bull market now with our own mike santoli, who's here on set with me thank you so much.

jeff crumpleman joins us, as well but he's stuck in the screen guys, thank you both mike, i was just saying, let's talk more about the bull market. is it actually a bull market yet? >> i think it still qualifies a as a long-term bull market we might have had one of these bear market disruptions late last year. >> a baby bear >> a baby bear the pattern here would be about a 20% loss in the s&p 500. that happens very quickly as part of a growth scare, but not a recession. >> why is it a baby bear >> because it's brief. 20%, barely just tagged it in december and also because it's not associated with a recession. it's not one of these multi-year, grinding losses like we had in the early 2000s. >> jeff, is that because of the fed? neel kashkari this morning basically said the pause last week is keeping gdp growth on track. and steve liesman referenced the same idea a couple of weeks back he said, when we've had sell-offs like this and the fed responds, you know, it helps prolong the rebound. do you think that's what's going on here?

>> well, i think that the policy issues are part of the equation that's giving the market a lift. we've gotten good news on the fed front and on the trade front, but quite frankly, it's just in the data and we thought people were uber skeptical and pessimistic last year when particularly late last year, when the data just didn't support it and when you look at manufacturing, service, employment, the data, byand large, was definitely tilted to the positive and that's why we remained positive on the market >> jeff, what do you think about this factor orders report. it was delayed, we only just got it because of the shutdown this goes back to november you know, it's not a huge input, but it's more of a barometer and it says that -- you know, we were so worried about the first quarter gdp, it turns out, maybe the fourth quarter was only a little bit over 2% i know that's so backwards looking at this point. what do you think of the significance of anything is, at this point today >> you know, it's just a mosaic, and we can, you know, look at one number and have some kind of negative reaction, but when the

preponderance of the data, and there's a lot of it, look at the ism that came out last week. look at all-time lows in unemployment claims or lows going back to 1969 and you know, if you just look at the preponderance of the data that we see out there, no, i'm not worried about a factory orders report. >> and we'll circle back in just a minute to some of the stocks you like here. but mike, i also wanted to call attention to the market conditions that stifel highlights this morning. they say the market conditions we have seen has more than 11% of the s&p in overbought territory, which is the highest level since september 21, which was the day after the all-time high so should we be worried? >> i think some of short-term indicators are showing we've used up a lot of that negative sentiment from december this this rebound rally has gone a little bit farther and a little bit longer than you typically see and basically hasn't obeyed a lot of these points where it would have been logical to pull back some people say, well, that proves that december was this

downside overshoot that we're just kind of making up, but, yes, i think it makes sense to prepare for some kind of a pause or a reset just because of short-term overbought conditions >> so jeff, give us some areas of the market that you like here i see financials as one of them. and i'm curious if you're worried about this and procter & gamble, which you own, all-time high today going back to 1896, i think, when it listed, and boeing so what about the financials >> so we do like the financials, kind of just across the board. and they certainly haven't participated but the cyclicals, which include the financials, we do like so whether it's bank of america, schwab, or if it's in fin tech, we think those stocks are attractively priced and have maintained solid fundamentals throughout we also like other cyclical areas of the market, like industrials, cyclical tech, consumer discretionary

broadly, we've been positioned there when many folks were saying, hey, run to defense. and we just haven't thought that would be the profitable kind of scenario or case and certainly this year, we're being rewarded for that. >> absolutely. and kudos to you on that tell us the case for procter & gamble, which i don't think is a cyclical, unless i'm wrong >> well, i'm in cincinnati today, so you know, i hail from the city where they reside so five years plus of kind of underperformance where organic growth has been challenged and finally we're starting to see through some marketing initiatives, some innovation, you're starting to see that growth we had a wonderful report this last report where you saw organic growth that was above expectations so we think it's a pretty good full-time, after under-performing for a while, to own procter & gamble >> mike, last word to you, then. we have maybe. we came back too quickly, maybe, based on some of this.

but, you know, if we start to look at cyclicals outperforming and clear through earnings season and so forth, what do you think are the parts of the market that could keep going >> the longer term implications of having this 20% reset, having people panic in the very short period of time, in a liquidating thing is the most beaten up parts should assemble first. it's not clear to me if we stay in an uptrend, that people are going to totally ignore the big, dominant growth stocks that got us here. i don't know that it has to necessarily be one sector, one type of market the big question is, is the fed correct to be patient, and are we back into a low growth, but sustainable growth picture and that's going to decide whether, in fact, all of these people drawing comparisons to 2011 and 1998, where you had these very happy endings, whether that's going to bear out. >> and apple too after the bell. good stuff thank you, jeff. michael, we'll see you in rapid

fire and here's what's still ahead here on the exchange >> coming up, the future of venezuela's government will have a big impact on oil giant citgo. thousands of u.s. jobs and the future of three big refineries are hanging in the balance plus, bernie sanders and chuck schumer are calling for a limit on stock buybacks. but who would that really hurt and the company that will buy your house and rent it back to you what do advisors look for in an etf? i tell clients, etfs can follow an index, this is "the exchange" on cnbc it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives,

risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

welcome back to "the exchange." president trump in his pre-super bowl interview yesterday said military intervention in venezuela is still an option in limbo is the fate of the country's most valuable asset, citgo. >> thank you, kelly. thank you for having me on your show there are a few options and scenarios for citgo. here are the top three scenario one, maduro steps down or is ousted the u.s. has ordered all citgo revenues to be diverted to a new u.s.-controlled account that will then flow to the administration this is the best outcome for companies doing business in venezuela and for citgo. scenario two

if maduro remains in power, it's likely russia and china to the rescue because the u.s. government will keep a strange lhold on the citgo money, starving the maduro regime of hard cash. they would hen likely have to go begging to countries in china and russia, countries his country already owes tens of billions of dollars to third and final scenario, an auction of citgo russian oil company rosneft has a 49.9% claim on citgo, collateral for a loan venezuela needed three years ago if they fall, rosneft could try to force an auction in the courts that has already been called a national security issue by treasury secretary steven mnuchin. three options, three outcomes and a very unusual situation for one of america's largest gasoline refiners. >> now, if that wasn't complicated enough, there's

actually another big angle to the story. there's a canadian hedge fund, they want a $1.4 billion claim against venezuela. it has to do with a gold mine, a decade-old case, and basically, without getting too quickly into it, they said, listen, we think the lien still stands. we don't care what happens with the government of venezuela. our case is still open in the courts if they don't get paid, they could call to an option to citgo. and citgo could file for bankruptcy in the next couple of days >> how many workers in citgo >> a few thousand. and at their headquarters in houston. >> we'll continue to follow that i want to talk as well about bill gross he has announced again this morning that he is retiring. this ends a four-decade career he started, of course, and came to fame and was named fund manager of the decade in 2010 at pimco, this was by morning star. he left, he retired once, he went to janice he was supposed to build up their whole operation. as we know, the assets -- you know, he put in about $700 million of his own money

they initially raised a bunch for his fund the fund underperformed last year, investors fled, and you think he's really done this time >> he's not done trading, because his family fund. him with his son and daughter, they'll run the family office. he's giving away $800 million. one of the biggest donors in the united states. listen, we know, you've worked in the media for a long time in the media, we have the attention span of a pigeon, right? you swat at a pigeon, they come right back you want to pile on a bill because of the bad performance of the unstrained bill, whatever, the guy built the bond market he made billions of dollars for his investors, billions for himself. he expanded the bond market. and he moved the bond market >> people -- correct me if i'm wrong, he earnedthe moniker bond king because people didn't talk a lot about active management and bonds as this extraordinary strategy and by the way, the journal today confirms that in equities,

it's hard to outperform the market in fixed income, you actually can. what do you think happened the last couple of years >> i think some terms went wrong. we know about the german sort of bet. some of the things in the emerging markets didn't go quite as well. but it is tough. i think you're coming in, he was coming into a mature market in some ways, literally and figuratively next door to pimco, the company that he built basically. obviously, that was a difficult separation on the pimco side, as well but you know, people want to sort of pile on, i think, in the short-term but the reality is that this is a guy who outtraded and outlasted and outmade for his clients and for himself, more money than 99.9% >> also is so true with so many stars, you had to be with him in the early years, to really reap the best gains that he was able to deliver you had to be with him in the early years, through the time when he got the most publicity and as all of that publicity came, it got very difficult for him. we see this pattern time and aga again. it's really hard to sustain that kind of outperformance >> i'm friendly with bill.

i'm not entirely neutral here. i'll totally admit that. i've spent some time with him and he's always been super kind to me. you know when you're up here, sometimes people want to take you down to here >> sure. >> whether it's performance or personal life. you know what i mean it's just kind of the unfortunate ways that some people are but the guy built an industry. he built a fortune for himself made a lot of money for his clients. outperform eed forever and ever and ever i know bill, the guy's a competitive guy. he's a hell of a golfer, he's a good gambler he basically put his way through business school. >> i read that, by gambling in las vegas. >> i don't think bill's done i haven't talked to him. bill, if you're out there, give me a call, but i don't think he's done. >> appreciate it, brian sullivan coming up, a start-up that will buy your home and rent it back to you. and a look at why people are doing that what happens if you can't make rent we'll ask. plus, a big drop for nfl ratings after last night's snoozer of a game, and this as jeff bezos was spotted in the commissioner's

box? an inflection point for the nfl on tv? we'll ask, coming up >> announcer: want to get social with the exchange? e-mail us at theexchange@cnbc.com or find us on twitter @cnbctheexchange.

welcome back to "the exchange." here are some of the movers this hour shares of apple could soar this year on media bundling and streaming. morgan stanley predicting a 27%

upside, to be specific, for the stock from here. jpmorgan today alsosaying that apple should buy netflix we will have more on that shortly. apple is up about 2.7% get this, that pushed its market cap past amazon's just moments ago, so now it's the second largest company behind microsoft, at least for today. clorox's higher earnings follows a beat in profit margins they expect tariffs to hurt profits by 5 to 7%, not a huge ding, and clorox is the best performer in the s&p right now, it's up 6.5% and finally, dating service match alllower on a sell rating from goldman sachs today, who says its valuation is high re relative to its growth prospects. match down about 1.1%. over to sue herrera now for an a cnbc news update >> a new study from the united nations trying to put a price tag on the u.s. tariffs on china. if the two countries do not reach a trade agreement before march, the u.n. says the eu would take over about $70 billion worth of trade between

the u.s. and china, because of those tariffs, adding that china will shift more than 80% of its exports to other countries an mma fighter, mixed martial arts fighter, suspected of killing two people, including an ex-girlfriend was recaptured yesterday after escaping from a prison transport van in texas. cedric marx managed to escape after stopping at a mcdonald's and was found in a trash can nine hours later florida lawmakers are appealing for harsh eer punishments for those who commit some of the most violent crimes against analyst. and lindsey vonn is back on the slopes in sweden today as she prepares for the final race of her professional skiing career vonn announced on facebook friday that next week's world championships in downhill and super-g will be her last in a career that has included three olympic medals and two world

championships. but i bet we won't have seen the last of her. that's the news update this hour guys, i'll send it back to you, kelly. >> i think you're right. sue, thank you just about 30 minutes to go until "power lunch," and today, we are crowning the stock draft champions. >> it is the day after the super bowl and that means we have brought to an end our annual stock draft competition. it -- i'm not going to tell you who won, we're going to save that this will be the big tease it wasn't even close, ladies and gentlemen. it wasn't close. there were eight contestants, only three had positive returns over the period of the stock draft, but the one who won had very positive returns and we'll tell you all about that on "power." the rest were in the negatives >> what did you think of the halftime show? >> i was kind of bored by it i think adam levine is a good singer, he's a good pop singer and i like the tattoos >> what did you think about the spongebob and the -- i'm thinking, what are we watching >> yeah, my son was -- really came alive there when the spongebob came on. it was the favorite spongebob

episode of all time. but you know, it was all right it was fine. one of our associates over here says, if it isn't bruno mars and beyonce, skip the halftime show. >> i think they're right here's what's coming up on "the exchange. >> ahead, the buyback battle facebook turns 15. the street says apple should buy netflix and have we hit peak podcast? it's all coming up in rad repi

welcome back it's half past, so you know what that means it's time for rapid fire today and here to break down the headlines with me are dom chu, seema mody, and mike santoli if we put you to this much trouble, you've got to go downtown, out here we're going to at least double you up anyhow, this is the first story today. senate minority leader chuck schumer and senator bernie sanders are calling for a limit to corporate stock buybacks. they're saying that the boom has helped fuel income inequality, the worst levels in decades, and that the problem is bad for the long-term strength of the economy. are they right, mike >> i think they're right, that it's a very popular complaint, to say that companies are not

doing enough to pay workers more and to maybe make investments and they're buying back their stock too much i think it's fascinating how much has become a populist issue. i do think it's -- everyone should recognize how it sounds to someone who's not involved in business or finance to say, wait, they can use the company's cash to buy back their own stock and it's linked to their own compensation >> it sheds light on what the democrats are going to use as this presidential cycle picks up >> it's absolutely fodder for what's going to happen right now. and this whole idea that wages have not been have growing as fast as people want. >> the idea the companies have been not investing, not necessarily true in fact, public companies invest more than private ones do. >> that's exactly right. >> so whether or not -- look, you can argue for or against buybacks, but it should be an argument, if you're going to return to capital shareholders, do you do it as a dividend or a buyback? >> and it used to be much more

skewed towards dividends, absolutely >> buybacks were effectively illegal until 1982 and there was a rule change that allowed it to happen it's not as if this has always been the case, but it's not demonstrable that companies are chronically underinvesting just because they're buying back. and i think that point needs to be made. >> facebook turns 15 years old today. it's been accused of fueling fake news and a new study says the loss of local newspapers which is argue apply because of facebook and google is feeling an increase in local corruption. where does facebook go from here >> the first 15 years were all about user growth. and given what's happened the last six months around data collection, the controversy around the type of control we have over our data, that clearly tells us that's where the conversation is going to go. and the priority for facebook to figure out what that actually means for its bottom line. >> the first 15 years were, hey, isn't this awesome and now it's, hey, is this really awesome >> it's so crazy, too. when facebook really started to get traction, we were talking about the demographic.

it was mostly late teens to early to mid-20s folks, right? which is fine, but now the spreading of fake news phenomenon is about older people using facebook as a way to get news so it's almost as if the conversation has shifted away from that younger demo, which everybody wanted back then, to like, now my father and my grandparents getting their news from facebook. >> it's amazing, obviously, the company sounds like it's going to be playingdefense for a while for all of these issues, but what's the value of $2 billion users worldwide, that install base and how sticky it is >> it's the way people engage with the internet. >> to me, it's the bigger issue, if user growth is so important and those user growth numbers, you know, are imperfect or include a lot of things like bots, a bigger setback i would think from an investor's point of view than this idea that consumers are going to stop using the platform, which frankly so far, they're using it less >> and like apple, look at the ecosystem that facebook has created with all of these influencers that use instagram

now, that is their job >> or small businesses >> sometimes i go to look at a local business or an event or something and it's a link always to their page on facebook. >> i was laughing one time, i was having a conversation how based upon those user growth metrics, when is it that facebook is just going to change its name to instagram and have that be the parent company in essence, everybody's always using instagram for everything else, but it's not spreading fake news as much as just the facebook platform. >> and look at research in motion, when they changed their name to blackberry, when they became their major product >> that's true alphabet is not the same they just came up with alphabet as more of an umbrella >> in reverse. >> yeah, exactly shares of papa john's jumping today on news it received a $200 million investment from hedge fund starboard value the company says appointing starboard ceo jeffrey smith as its chairman, we know the biggest setback for this company was the loss of the nfl account, the loss of ceo. evidence now they can join some traction >> jeffrey smith is an activist

manager who has a pretty decent career of kind of getting involved in companies and trying to stir things up enough to where they're doing -- they're shareholder unlocking -- >> and very focused on operational efficiencies those things with the restaurant business, it's just tough. it's such a commoditized, hyper-competitive business that you're not only facing the challenges of getting your reputation back from the fiasco from a pr perspective over the last couple of years, you've also got to compete with all of these other folks out there, as well >> and domino's has done such a good job, even with the ceo turnover, it's shown no loss of memento. >> and the way starboard took that 2014 coup of derden, but this is pizza fast chain, where there's a hypercompetitive environment. and plus, the consumer becoming much more conscious about prices as well as nutrients and health. so this is really going to be a challenge on what they can actually do to papa john's core product. how do you make it -- >> remember, domino's dropp epe

pizza from its name. and i could go on about domino's pizza, i have never had papa john's >> i have. i'm okay i kind of like it. >> you like it >> mike, you live in manhattan, so -- >> even if i had, i wouldn't admit it >> topic for a new note from jpmorgan today, suggesting that eem use its nearly $250 billion cash hoard to acquire netflix. it's not so much that this idea is new, it's that it's coming from jpmorgan, which is really endorsing the idea that was once kind of a joke that apple should buy netflix. now all of a sudden, this seems very mainstream. >> mike, we've kind of talked in the past about the speculation of who apple is going to buy and the important thing about this note, is they do say, for the record, this is just pur speculation, so that's big >> to me, the takeaway is that the clients are asking analysts, what is apple's next act this is a response, implicitly, to the idea that, okay, fine, it's no longer an iphone growth

story in terms of units. we know about the software ecosystem, but is there one big corporate strategy type move they can do with all the cash. and netflix, it seems like that horse is out of the barn in terms of the value of it >> the only -- i actually kind of love this concept, because it's clear that user growth is going to haunt apple -- for i don't care what you say about the watch. the only issue with netflix is in retrospect, do they say, we literally bought it at the highs. we bought it when its valuation couldn't have been bigger. its market influence couldn't have been bigger and right before disney and comcast and all of these were coming to market >> a $150 billion market cap for netflix. so if we were to buy netflix at a 20% premium, that's $180 to $200, to spend that much cash on a company. >> but they have the cash. they wouldn't even have to borrow hardly. >> so is it better to do that or spend it on buybacks and dividends. >> they mention two other companies, by the way, in that note, soens, activision/blizzard is another one >> what's happening in gaming is

a whole another story. but it also looks like spotify could moving into the podcast business, in advanced talks to acquire gimlet it's the driving force behind popular podcasts like reply all and crimetown. i looked at spotify shares, they're up about 1% on all of this it doesn't seem like the price would be the issue >> it doesn't seem like a big bet. but i do think it's all about -- they obviously know where the listening hours are going and they want to be in the way they also wonder if podcasting is going to be one of those online formats that becomes kind of winner take most. does there have to be a big centralized hub or bundle of podcasts i'm not sure if that's yes or no >> it depends on where the ad dollars flow so we're showing the numbers behind it. here's the percent who have ever even listened to a podcast it's still not half the population >> underpenetrated market, but perhaps it tells us that it's in the fantasy and it can grow every time, especially if you look at china, that has really done well in the podcasting industry

they use subscriptions, gaming, coup coupons, it's 20 times the size of the u.s. podcasting market. so some people were saying that this acquisition could help accelerate spotify's global push, if that's their core push. >> that's astonishing. >> and it's about the content. you have to get content creators to get in there and get stuf out there that people want to download and hear on a regular basis. >> and i wonder how much of this, and i feel i'm at odds with what the trend is, but it's clear that the shows are so popular. i like the news podcasts or the econ ones, and i don't know if those are as profitable or as lucrative, or if they have to be almost like a netflix hit. you have to come up with something that everybody's binge listening to >> the podcasts i listen to are not business related, i listen to the lifestyle ones. it's like my release from doing all the other stuff i do >> we would be worried about you if you listened to a market podcast. >> all the time. >> is cnbc writing we might be getting into fthe podcast -- >> we have a couple. >> i mean, we are already in

the -- yeah, okay. it's not peak yet. thank you, guys, all very much seema, dom and mike. google parent alphabet is out with earnings after the bet. the shares are drifting higher ahead of the report. youtube is in focus. investors hoping for a breakout of their performance we'll talk aboutt,ig aer th is i rhtft

welcome back want to draw your attention to shares of apple today, surpassing microsoft just moments ago to once again becoming the world's largest company. shares of google's parent company are trying to escape correction territory they're still down about 12% from last year's highs that's better than rivals like facebook and apple, which are still down more than 20% from their highs. so what should we expect when the last of the f.a.n.g. stocks reports? yoing joining me is ed lee and aaron

kessler with raymond james great to have you both here. so ed, first, just kind of more narrowly on the earnings, what do you think is most important for investors this afternoon >> so when it comes to alphabet, we want to see how cloud is doing. that's their big -- it's been their big growth area. it's a newer area, for one thing. search advertising, that's their chess piece that they can hold on to, that's always going to be good, always going to be stable, nice and growing and we'll take a closer look at things like cost per click that's an important metric to look at. but the forward momentum has to be about cloud and are they taking share away from microsoft, from amazon, is it just growing altogether? that's going to be the key part. >> and they're starting to give more information about the other -- >> they are giving more information. also, youtube has always been sort of a question mark for me, just because, they don't release a lot of data around it, and it's not always clear how their business is, what the costs are for that kind of a business. if they gave us more information on that -- >> that's a great point. aaron, what do you think -- there are some investors out there who just kind of look at this idea of breaking up google,

not because of anti-trust concerns, but because they say, look, you could have android as a stand-alone company trading at a great multiple youtube, maybe waymo. look at what valley people have assigned to tesla or some of these -- and google itself what about that? >> yeah, i think it's less about breaking it up versus investors want more transparency so to your point, we would like to get more information on youtube. i'm not sure why we haven't gotten that for several years now. but investors want more transparency on to youtube performance. other businesses, whether it's waymo, cloud, which they've given from time to time, some revenues with cloud, as well as google drive or google one but, yeah, investors want more transparency we like to do more of a sum of the parts analysis, and google, historically has not given that much data to be able to provide that to investors. >> aaron, i know the s.e.c. has asked other businesses in the past on business lines to say, we want you -- maybe even one of the out companies, we want you to give more transparency. ironically, if google doesn't that, won't it feed into people

being able to say, well, if you broke apart this piece and that, won't it actually cause people to do that more? >> yeah, i haven't heard as much investors saying they need to separate the business. they're all, let's say they're both advertising, but investors want to be able to see the growth rates versus youtube. we think youtube continues to grow at a 25% plus growth rate but google doesn't obviously disclose that. i think investors could value some of these assets higher. >> i see that you have a $1,300 price target is that true, an overweight rating what are you going to be listing for this afternoon >> and we always focus on the google sides growth. it's still kind of 80% plus of the revenues still the kind of, where all of the operating profits are for google and so we're looking for about 20% plus growth in kboogoogle ss search and youtube we're also looking for search snof the newer businesses, google drive, google hardware,

updates on waymo we view those today as option values, but still focused on core google search, youtube, as well as traffic acquisition costs as well and margin, which is always a big operating expense for google >> that's a laundry list so finally, people have wanted and watched with great interests what happened with these other bets in the past and they often underwhelm >> they talk about breaking it up and maybe some of the parts are worth differently. a big part of its operating ethos is we have this great technology weapon sort of incubate ideas, if they go somewhere great, great. if they don't, don't worry about it we'll move on. and a lot of what underpins their growth has been figuring out the tech more than anyone else you want to keep that. you want to take these bets and see whether they fare well or not, because you never know where the next thing is going to come from. and lastly, on the whole breaking up part, it's going to come down to how the whole u.s. government, if they start seeing antitrust in a new way --

>> then they might proactively -- >> proactively so more of an interventionist approach, the way that europe does right now the standard is, is it harming consumers? it's all free, most of the products are free for consumers, so it's a nice benefit from that really blunt assessment. and at the same time, it gets more complicated when you look at the entire ecosystem. >> minus the tracking. thank you all. ed lee, thank you. aaron kessler, we look forward to hearing what alphabet says after the close today. and then there was last night's super bowl it had sports fans super bored and the ratings prove it weilwr u wl app the highlights and the lowlights, next.

welcome back breaking news. disney ceo bob iger tweeting a picture of super bowl champs -- super bowl champ mvps -- no, who was the mvp? okay, julian edelman in jedi training costumes at walt disney world. i assume they're in florida? this is what you do when you win the super bowl eric chemi is here to recap the action, or lack of this might be the most exciting thing that happened to them in the last 24 hours. >> remember at the end when everyone was rushing brady there was a guy saying, we've

got to do the commercial, and there was a guy with a big walt disney world placard, i wonder if it's the typical, what are you going to do next when you win the title. >> so we know the game itself was a snoozer. the ratings confirm that, right? >> 44.9, that's down 5% from last year. last year itself was already a down year from the year before a lot of people point to the low score welco scoring, the fact that people are tired of the pats. a lot of people thought the rams shouldn't have been there, because of the way the refs gave them that game against new orleans. and the fact that the rams don't have fans, because they were in st. louis a few years ago. >> so this matters a lot for tv ratings, and maybe for amazon ratings, given that jeff bezos is popping everywhere in the future but the fact that this was such a disappointment doesn't necessarily mean that the nfl is losing traction or that the, you know, rights are becoming less valuable >> the ratings for the year were

actually very good they were up 5% from last year, but there was a lot of offense scoring, pat mahomes' touchdowns, all of that kind of stuff, but you didn't see that in the super bowl and the ratings were down. in a nfl wanted offense because high offense meant high ratings remember we talked about two weeks ago, those championship games had big scoring, overtime, record numbers this had bad numbers they wamay want to make this kid of game extinct. >> what do you make of the jeff bezos in the box with roger goodell? is it because nfl wants the tv companies to say, look, we have other options or we know bezos and amazon carries the thursday night games? >> everybody was there who got -- >> in the box with him >> which owners box, i was there the last few days. everybody was there. every ceo of every major company, every media company, they were all there. if you're big time enough, you have your own box. >> did the nfl package come up

>> sunday, the directv comes up within a couple of years the value, that's what this all goes back, to which networks are going to be carrying that and maybe amazon gets a bigger piece of it. that's what i think from seeing the commissioner's box. >> that's your game. >> eric, thank you homeowners have trillions in equity but some can't access through traditional means. a new start-up is working to change that while keeping people 'l tirom wel describe it for you next on "the exchange." we all make excuses for the things we don't want to do. but when it comes to colon cancer screening... i'm not doin' that. i eat plenty of kale. ahem, as i was saying... ...with cologuard, you don't need an excuse... all that prep? no thanks. that drink tastes horrible! but...there's no prep with cologuard... i can't take the time off work. who has two days? and i feel fine - no symptoms! everybody, listen! all you need is a trip to the bathroom.

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need to access your home equity but can't qualify for a refy a rather unconventional method in this start-up diana olick has this story. >> reporter: chris driscoll needed cash for his real estate business he had plenty of equity in his gainesville, georgia, home, he couldn't access it >> if my credit score was a few more points or, you know, i made the banker happy that day or whatever, i could have probably done it for a little less money but that's not how the world works. >> reporter: enter easy knock. a barely 2-year-old company that will buy your home from you but

let you stay on as a renter at any time during the lease you can buy your home back. >> it's a company allowing people to access equity in their home that have been shut down by the traditional lending markets. >> i'm moving. >> reporter: easy enough makes money through rent and extra fees at the end of the lease, through five years, the tenant has the right to choose between buying the home back and selling it to someone else easy knock does not want to keep it. >> we are not in the business of continuing to own homes. >> so far, the company bought about 100 homes in five southern states but with a recent infusion of $100 million from investors, kessler said he expects to expand to 36 states and 2,000 homes this year alone. for chris driscoll, the financial process was pretty easy but he admits there is an emotional downside especially if he's unable to buy it back at the end of his lease. >> the house has sentimental value to me.

my parents lived on the property, i grew up here so yeah, it would sting a little bit. >> reporter: but there are benefits as a renter too like not paying property taxes, homeowners insurance or any of the maintenance on the home. for now, easy knock is contracting out its rental management business but as expands, expects to bring in house as well. >> wow, i know you've been covering a lot of this the different ways it's changing for homeownership and renting. this is great stuff. thank you, diana olick in the meantime, idaho senator mike crapo is putting forward a proposal to allow financing firms freddie and fannie to become private companies. what would that mean let's bring in tim myopolis. welcome to you i think diana's report highlights there's a lot of changing needs in the housing market what would happen if fannie and

freddie leave conservatorship? >> a huge amount of change in the housing markets, which is why i wanted to get into the fintech space but with respect to fannie and freddie, good they're getting them on permanent footing and a lot of complications will come with that structuring them in a way to support the market without raising prices a lot. >> basically low mortgage rates for the home buyers, government guarantee that has come without having to bail them out again. if we put them in private hands, they need a lot more capital and if they do go the route, it will enrich the hedge funds who bet on this happening. how do you expect that to play out the last couple of years >> people have been working on this issue for the last ten years since the companies were taken over by the government but i think when it comes to the corporate finance part of this,

policy makers really need to think about creating business models that will attract $150 billion or $200 billion in capital. they will have to give investors an opportunity to get a return on that in a way that doesn't require homeowners to pay dramatically higher homeowners rates. >> why would they if this happens? >> it comes down to one of the capitalization requirements for these new entities. >> right now, they're sweeping all the profits to the treasury. they're not retaining anything if they were stand alone firms, how much would they need to raise to make sure they're viable >> the general consensus is $150 billion to $250 billion for fannie and freddie together. a lot of money but less than some have advocated for in the past what's the percentage of capital that policy makers ultimately decide and i think, you know, the current regulator has done a lot of work in this area and i think people are starting to triangulate to a number that probably could have a relatively modest impact on mortgage holders. >> i was going to say, let's

bring it back to that. why wouldthat move towards privatization mean that there's a bigger spread in what a typical mortgage rate is over the benchmark treasury bond? >> it's all a question of today, mortgage rates are set in part by the gses, fannie and freddie. based on what they essentially pretend their capital is 2% to 3% to hold 5%, the only way to make it viable is charge more for mortgages. >> that's a real possibility if we go this route >> that's a possibility and a difficult question policy makers need to wrestle to the ground. >> i wonder what the treasury would think about the loss of funds. they're taking quite a bit from these, aren't they >> they are taking a lot returned billions to the treasury but i do think policy makers including this administration have concluded that's not a good long-term solution we need a permanent foundation

for housing finance which touches 20% of the national economy. >> we'll see if we head this way. thank you so much for joining us pretty much better insight than anyone else on this. that does it for "the exchange," everyone i'll join tyler and melissa in just a moment on "power lunch" which begins right now i'm melissa lee with tyler mathisen backlash over buybacks should there be limits on what corporations do with cash? plus, a big move in bonds signaling stocks or a painful u-turn pats are super bowl champs, you know that but crown the cnbc stock draft champ. the winner and jim cramer will join us live "power lunch" starts right now >> thank you very much, melissa. i'm tyler mathisen welcome to "power lunch. stocks near session highs. s&p 500 for a fourth straigh